What is Binance Chain and Binance DEX: Beginners Guide
Learn everything you need to know about Binance Chain & Binance DEX! Binance DEX is the decentralized exchange feature created on top of the Binance Chain blockchain.
What are the primary functions you look for in crypto exchange? Is it speed or low fee commissions? Or do you primarily look for security and ease of use? Whatever it is, there is no shortage of exchanges on the crypto market and you might have already found the one that ticks all the right boxes. But If you are a pro cryptocurrency investor, even a beginner in the crypto market, there are good chances that you have heard the name Binance, and for good reason, since it is the popularized cryptocurrency exchange by trading volume.
One such platform, Binance, claims to use latest technologies to stabilize transactions and generally simplify operations. Launched in 2017, Binance crypto exchange is devoted to promoting blockchain’s main principles such as fairness, transparency, safety, and stability.
This guide takes a closer look at Binance Coin, Binance Chain, Binance DEX, how Binance Chain works, Where to trade Binance coin and what are the future may hold for this earnest project.
Table of the contents:
- What is Binance?
- What is Binance Coin?
- What is Binance Chain?
- What is Galileo?
- What are the Features of the Binance Chain?
- What is Binance DEX?
- What are the benefits of Binance DEX?
What is Binance?
"The brand name “Binance” is the combination of two words: Binary and Finance."
It is one of the world’s leading cryptocurrency exchange platform.
The Binance Coin (BNB) is a cryptocurrency which can be used as an intermediary when exchanging money, from one crypto-coin to another.
Binance is the largest cryptocurrency exchange platform which was initiated in China but recently moved their headquarters to the crypto-friendly Island of Malta in the EU. Binance is most popular for its crypto to crypto exchange services. While the company is still getting more popular on the crypto market, it has handled to gain a lot of demand to its impressive number of Initial Coin Offering listings, skilled attitude and friendly CEO and also due to its low trading fees.
Binance coin was circulated during the ICO in July 2017. The main goal of coin creation was inviting funds to develop the Binance exchange. Mostly, Binance coin (BNB) was an ERC-20 standard based Ethereum token. April 18, 2019, Binance released its blockchain, and coins were exchanged on it.
Binance Coin was based on the ERC20 standard and used Ethereum blockchain until Binance own blockchain was created. Binance Chain was released in April 2019. It is a software system for Binance exchange, Binance Launchpad, and more to come.
Overview of BNB Token:
To fund the creation of the exchange platform, Binance team developed a token and raised funds through an ICO and raising some $15 million.
The BNB token can be used for paying the transaction fees obtain while exchanging the digital coins. For example, if you want to convert your one crypto coin to another crypto coin, you would need to pay some transaction fee.
The BNB Token was most innovative. Users who purchased the token and used it as a means of paying the transaction fees were rewarded with a 50% discount. Most users would take benefits of the tokens to buy more Bitcoin or other major altcoins – and got some high returns.
The superior management of the exchange platform helped bring in millions of users. The crypto coin exchange space was highly competitive, but Binance has risen to be among the top 3 on the crypto market. Still, it is the largest exchange platform globally by volume traded.
Where to trade Binance Coin (BNB)?
It’s easy to exchange BNB coin due to a rich number of platforms accepting this cryptocurrency. Yet, you can buy any coin given on Binance Exchange for BNB.
Some of the lists of exchange platforms are:
Roadmap of Binance
Binance team does not have an appropriate roadmap, but they share all the Binance based news and upcoming developments in their own blog. The CEO of Binance, Changpeng Zhao always announce all the Binance newness in his Twitter.
Binance Chain is a blockchain software system originally developed by Binance and the community. Binance Chain is a community-driven development project with many professional developers and contributors from all over the world.
The Binance DEX is built on top of a Binance Chain blockchain with BNB as a native cryptocurrency. Therefore, any BNB transaction combined with the DEX could be found in Binance Chain explorer. There is no proof of a single Binance Chain whitepaper other than the official documents section.
Binance is released its own decentralized exchange which will allow users to fully control their funds. The funds will be stored on users’ wallets. BNB token will be moved from the Ethereum network on its own blockchain – Binance Chain.
After launched Binance Chain, this news has attracted the interest of even more investors than before.
In the binance chain, there will be no mining process due to some reasons. Binance chain uses a BFT (Byzantine Fault Tolerant) and PoS (Proof-of-Stake) consensus. This is similar to some popular blockchain systems, such as EOS, NEO, MINTER, TEZOS & TRON…
On the Binance Chain you can:
- Send and receive assets
- Release your own token
- Burn/mint and freeze tokens
- Build trading pairs on Binance DEX and trade assets
- And the primary factor is Binance Chain will be created a new cryptocurrency decentralized exchange – Binance DEX.
Types of Binance Nodes:
The Binance Chain has three types of nodes: witness nodes, validator nodes, and accelerated nodes.
On the Binance Chain, a full node is called Witness node, it contains the entire data & business logic that has developed on the network. This node helps to record the history of the network and can be communicated easily with other nodes.
Validator Nodes play a primary role because it can perform in consensus mechanism and responsible for verifying all transaction on the Binance chain and are kind of consensus by voting to provide blocks.
Accelerated Nodes are a part of the privileged node in the Binance chain. They are faster and more secure and by having accelerated nodes running, the entire transaction speed on the network increases. Binance claims that different organizations are currently owning and running these accelerated nodes.
The Main Function of Binance Chain
The primary function of the Binance Chain is for trading. In the Binance DEX, orders are sent to the blockchain itself and implemented by the nodes to assure maximum security and transparency. User Orders are filled instantly and funds are automatically moved to the user’s account.
Second major function and feature of the Binance Chain is the capability to create completely new assets or tokens. The token standard on the Binance chain is called BEP2, which is similar to the ERC20 standard on Ethereum. New assets can be created through the “issue” transaction.
Although not having intentions to become a fully-fledged smart contract system, the Binance Chain is still an open blockchain, meant to be a platform and an ecosystem for other projects to build on top of. In other words, the long-term success of Binance Chain will depend on the quality and team of developers and entrepreneurs developing projects on the network.
What is Decentralized exchange (DEX)?
Decentralized Exchange (DEX) is one type of the cryptocurrency exchange, in which traders own their private keys and control their funds. This figure out a problem like the fact that centralized exchanges store private keys in their bases and as the saying goes: Not your keys – not your Bitcoin.
“Decentralized exchanges, when fully functional, will mark the end of any potential control by governments and will be the beginning of the largest economic boom in human history”. - John MacAfee
What is Binance DEX?
Binance DEX based on the Peer-to-Peer (P2P) protocol and enable users to exchange their crypto assets directly between each other. The major benefits of Binance DEX are the matching system. Binance DEX is developed on a high powerful blockchain engine "Tendermint Core" with one-second block times, that provides the high speed, which is also the same to centralized exchanges.
Advantages of Binance DEX:
Both centralized and decentralized exchanges have their primary advantages and disadvantages. But by creating the Binance DEX in aligned to their main centralized exchange, Binance is able to enjoy the benefits of both.
Binance already has a highly competitive benefit compared to existing DEXes in that they have an extremely visible and recognized brand, a large existing user base, and abundant resources for liquidity, development, and business development.
The Binance team also has similar experience running a successful exchange with a proven and tested business model.
The Binance Chain is a unique and immutable blockchain platform. The aim of this new blockchain is to allow users to create new crypto coins or tokens, exchange tokens, send and receive BNB tokens, and even stake their own tokens in future governance decisions.
The focus of the Binance Chain is to enable the development of the decentralized exchange platform, Binance DEX. The Binance DEX solves one of the primary problems and vulnerabilities of centralized exchanges, which is holding users’ funds.
The Binance DEX is non-custodial so traders maintain control of their private keys and funds.
The Binance Chain was developed to focus on multiple core features that solve many of the problems of existing decentralized exchanges. Its aim is to have high speeds for a high volume of transactions and users with the goal of 1 second block times as opposed to Ethereum’s 20 second block times.
It also aims to cut down on the front running and develop a user experience that is equal to its centralized platform.
Finally, Binance Chain Releases Latest Version of Its Mainnet, Galileo
Binance Chain, the blockchain launched by cryptocurrency exchange Binance, successfully completed an upgrade to its Mainnet. Dubbed as Galileo, the latest iteration is v.0.6.0 as announced by Binance on July 15.
Further reading - Binance Chain Releases Latest Version of Its Mainnet, Galileo
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A Mainnet sounds something big and important, but what basically is it and does it affect the value of digital assets?
A Mainnet is a blockchain that performs the functionality of transferring digital currency from a sender to a receiver. Mainnet is simply the main network, whereby actual transactions take place on a distributed ledger.
Explore more here - What is a Mainnet in Cryptocurrency?
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